By Jacob Wilson
The European Commission’s proposal to abolish roaming charges has passed the first hurdle, but there are still challenges to overcome.
The successful vote in the European Parliament passed 28 October established a transition period for data roaming to be phased out by 15 June 2017. Current roaming charges are twenty cents for per minute for calls, six cents per text messages and twenty cents per megabyte of data. From 30 April 2016 these charges will drop to five cents per minute, two cents per sms and five cents per megabyte.
Roaming charges apply when one travels outside their own country and uses their phone. This differs from Cross-border charges which apply when one calls within their own country to reach out to someone in a different country.
Abolishing data roaming is a high priority for the European Union on many levels. It is designed to promote greater cohesiveness within Europe by moving towards a single digital market. The principle is to encourage Europeans to travel freely without fearing the prospect of excessive phone charges.
However, a European consumer organization is skeptical as to whether the Commission will achieve their goal to abolish roaming charges on time. Head of the Legal and Economic Department at the European Consumer Organisation BEUC Guillermo Beltra raised concerns about an obstacle the Commission must face.
“The regulation that abolishes regional roaming entering into force depends on the completion of the reform of the wholesale roaming market,” Mr Beltra said.
“We fear it might be delayed because the Commission has just 13 months to negotiate the whole process.
“While it is not impossible, we fear it might be unrealistic, considering the reform of the wholesale market is a politically thorny issue.”
Mr Beltra cited national and telecommunication company interests as factors which could complicate negotiations. He said he couldn’t estimate how long it would take to successfully reform the wholesale market, describing the Commission’s expectations as “ambitious.”
European Commission spokesperson Nathalie Vandystadt said the Commission is working on the issue.
Will Domestic Mobile Prices Rise?
The proposal passed the Parliament convincingly, but not everyone expressed excitement.
UKIP MEP Roger Helmer put forward an amendment to reject the Commission’s data roaming abolition proposal two days before the vote. Mr Helmer claimed it would raise domestic mobile prices, resulting in a scenario of frequent travelers being subsidized by poorer consumers who never or rarely travel.
However, Commission spokesperson Ms Vandystadt said the Commission implemented regulations to reduce roaming charges since 2007, claiming domestic prices have never increased as a consequence.
Ms Vandystadt also said the Commission had secured safeguards so the abolition would ensure that any circumstances resulting in unsustainable costs would be passed to roaming consumers.
“In exceptional circumstances where the provision of roaming services at domestic prices is proved to make the domestic model of an operator unsustainable the regulation foresees the possibility for that operator to still apply a surcharge to its roaming customers,” she said.
Will Roaming charges really be abolished?
The BEUC consumer organization argue loopholes exist in the proposal which could mean roaming charges won’t completely disappear.
Mr Beltra cites a fair use limitation within the Commission’s regulation, which will set a limit on how long consumers can roam from home. He argues this could undermine the principle of abolishing data roaming costs.
“In order to make this (proposal) more consumer friendly the Commission needs to ensure that consumers can really roam while at home all of the time or most of the time,” he said.
“So they need to ensure this idea of fair use limitation is not used in a way in which the ability to roam at home is basically thrown away.”
Ms Vandystadt said the fair use limitation was necessary to prevent consumers from abusing the system and prevent increasing domestic prices.
“If the customer buys a SIM card in another EU country where domestic prices are lower than their home country, that’s abusive,” she said.
“This is why we have the fair use clause in the regulation, and once the limit has been reached while being abroad a small basic fee can be applied.”
The Commission will release the detail on the fair use limit by the end of 2016.
Is Roaming only one side of the story?
Cross-border telecommunication charges is a frustrating issue for consumers yet to be addressed by the Commission.
Roaming charges apply only when one travels outside their own country and uses their phone. This differs from cross-border charges which apply when a consumer uses their home country phone to contact people in different member states.
BEUC spokesperson Mr Beltra said reform of these charges would be a positive step towards a true digital single market.
“When you are in your own member state, and you use a service which crosses a border, that market is unregulated and prices are incredibly high for consumers,” he said.
“Imagine I pick up my Belgian phone, with my Belgian sim card and called your Dutch phone. I could pay €1 a minute easily.”
Mr Beltra speculated that the reluctance of the European Union to interfere with the free market would likely prevent the issue from being addressed.
Commission spokesperson Ms Vandystadt said cross-border charges were not on the agenda as ending roaming charges is the priority.